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The Canadian dollar CADUSD edged lower against its U.S. counterpart on Tuesday as investor caution ahead of a key U.S. inflation report this week offset higher oil prices.

Equity markets globally slipped and the U.S. dollar eased off recent highs as investors eyed Wednesday’s U.S. inflation data for clues on the Federal Reserve policy outlook.

The price of oil, one of Canada’s major exports, rose after Russia said oil exports to Europe via the southern leg of the Druzhba pipeline had been suspended since early August, reviving concern about tight supply.

U.S. crude prices were up 1.1% at $91.75 a barrel.

The Canadian dollar was trading 0.1% lower at 1.2862 to the greenback, or 77.75 U.S. cents, after moving in a narrow range between 1.2844 and 1.2874.

Still, the currency has recovered some ground after on Friday hitting its weakest level in more than two weeks at 1.2894 following contrasting U.S. and Canadian employment data.

Canadian government bond yields were higher across the curve, tracking the move in U.S. Treasuries. The 10-year rose 4.8 basis points to 2.725%, toward the middle of its range over the last few days.

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